What’s the difference between turnover and profit?
This isn’t a joke, it’s a very simple business question that hopefully most of you already know the answer to.
Just as a reminder though, turnover is the income that’s generated by a business, while profit is what you’re left with after all the costs have been taken out. It’s the reason why the phrase ‘turnover is vanity, profit is sanity’ is often used in business and it roughly translates as turnover is important, but profit is much more so.
For business owners the real issue is making sure that you have a good handle on the cost of everything and I mean everything. At Mountain Top accountants we see this all the time. People think that they’ve made a healthy profit but in reality, they’ve often made a lot less and in some instances nothing at all. Costs have a habit of getting hidden and overlooked mainly because they don’t come in at the same time that the income does. But what we do very well, is spot them and give businesses true and accurate records of where they stand financially.
Some of the work we do makes the difference between a successful business and one that isn’t. You see, if you don’t have a real picture, how do you know if you can improve it? How do you know what works well for your business and what to avoid at all costs going forward? Starting with the figures is one of the very best ways of planning for the future.
‘Doing someone’s accounts’ doesn’t make you a good accountant, ‘doing them properly’ does and that means finding out where improvements can be made. Financial figures rarely lie and having someone that can look at them in real detail is hugely valuable and if you’re in any doubt, that’s exactly what we do here at Mountain Top.
We started the business for a number of reasons but probably the most important one was that we wanted an accountancy firm that was different to everyone else out there in the South-West. Modern day accountancy has so much more to offer and if you ask us honestly, getting a decent accountant is one of the best business investments that you’ll ever make.
So, if you are interested in talking to us at Mountain Top about helping you increase profit rather than just turnover, then please feel free to contact us on 01752 914214 and remember, very few people get to the top of the mountain without any help.